The FTSE 100 edged higher on Tuesday, buoyed by strength in mining and financial stocks, as investors weighed positive economic data against sector-specific headwinds. The blue-chip index gained 0.5% by mid-morning, while the domestically focused FTSE 250 added 0.1%.
Market sentiment improved amid hopes for a ceasefire in the Middle East, which helped offset recent geopolitical tensions. The FTSE 100 is on track for its sixth consecutive quarterly gain, having risen in 11 of the past 12 months.
Mining and Banking Stocks Lead
The banking sector was a standout performer, with the banking index advancing 1.2% and posting a quarterly gain of over 20%. Shares of Lloyds rose 1.8%, while NatWest climbed 2.4%, contributing significantly to the broader market's advance.
Industrial metal mining stocks also performed strongly, rising 2.1% in tandem with higher metal prices. Rio Tinto, Anglo American, and Glencore each gained between 1.7% and 2.8%, reflecting robust demand for raw materials.
These gains helped offset weakness in other sectors, particularly housebuilders, which faced headwinds from a potential class action lawsuit.
UK Economy Expands 0.6% in Q1
Fresh data from the Office for National Statistics (ONS) showed that the UK economy grew 0.6% in the first quarter of 2026, matching expectations. This followed a revised 0.1% expansion in the final quarter of 2025. The ONS noted that all major sectors contributed to growth, with the services sector making the largest contribution.
Despite the solid quarterly performance, the data also indicated that households faced financial pressure before the additional price pressures linked to the Middle East conflict. A separate Lloyds survey revealed that business confidence regarding the economic outlook declined during the month, as persistent cost pressures and global uncertainty weighed on corporate sentiment.
Meanwhile, the British Retail Consortium reported that annual shop price inflation remained unchanged in June, with food inflation moderating and consumers benefiting from seasonal summer discounts.
Housebuilders Under Pressure
Housebuilding stocks were among the weakest performers, with the home construction index falling 2.8%—the worst-performing sector within the FTSE 100. Shares of Persimmon, Barratt Redrow, and Taylor Wimpey declined between 2.4% and 3.3% following reports of a potential multi-billion-pound class action lawsuit over alleged anti-competitive conduct.
Among individual movers, supermarket group Sainsbury's rose 2.1% after reporting its first-quarter results, though it cautioned that the Middle East conflict could contribute to higher food inflation. British holiday and insurance group Saga fell 3%, making it the biggest decliner on the FTSE 250 after reporting its first-half results.
The FTSE 250 remains on track for a quarterly gain despite a monthly decline, reflecting a mixed performance across domestic equities as political developments remain in focus. For broader market context, see our coverage of Nasdaq Futures Jump 190 Points as Oil Retreats and Chip Stocks Rebound and Magnificent 7 Stocks Hit Decade-Low Valuation Premium Over S&P 500.
This article is for informational purposes only and does not constitute financial advice.
